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ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Bonds. While any of the Bonds are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay the ioterest on and the principal of the Bonds, as applicable, as will accrue or mature on each applicable Interest Payment Date. Section 9.02. Other Representations and Covenants. (a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Bond; the City will prompt\y payor cause to be paid the principal of, interest on, and premium, if any, with respect to, each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance ofthe Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations ofthe City in accordance with their terms. Section 9.03. Federal Tax Matters. (a) The City hereby represents that the proceeds ofthe Bonds are needed at this time for the purposes specified in Section 3.01 hereof; that it is not reasonably expected that the proceeds of the Bonds or money deposited in the Interest and Sinking Fund will be used or invested in a manner that would cause the Bonds to be or become "arbitrage bonds," within the meaning of Section 148 of the Code; and that, except for the Interest and Sinking Fund, no other funds or accounts have been established or pledged to the payment of the Bonds. (b) The City will not take any action or fail to, take any action with respect to the investment of the proceeds of the Bonds or any other funds ofthe City, including amounts received from the investment of any of the foregoing, if such action or inaction, based upon the facts, estimates, and circumstances known on the Closing Date, would result in constituting the Bonds "arbitrage bonds," within the meaning of Section 148 of the Code, and the City will not take any deliberate action motivated by arbitrage that would have such result. (c) The City will not take any action or fail to take any action which action or omission would (i) result in the interest on the Bonds being includable in gross income for federal tax purposes; (ii) result in the Bonds being treated as "private activity bonds" within the meaning of Section 141 (a) of the Code; (iii) result in the Bonds being treated as "federally guaranteed" within the meaning of Section 149(b) ofthe Code; or (iv) result in the Bonds being treated as "hedge bonds" within the meaning of Section 149(g) of the Code. (d) The City will comply with the provisions of Section 148(f) ofthe Code (relating to paying certain excess earnings of investment proceeds of the Bonds to the United States) and the regulations promulgated thereunder. This covenant includes the maintenance of records regarding investments acquired with the proceeds by or on behalf of the City adequate to calculate the City's rebate liability. R:\SANMARlGO.OO\DOCS\FINALIOrdg<l.wpd 24